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The Sluggers Come Home Negotiating Video

9 Pages
2444 Views
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Department
Management (MGH)
Course Code
MGHB02H3
Professor
Samantha Montes

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1
SCENARIO
x Preparation Stage
o The Curry Brothers
Breakeven cash flow: $225 000
Target price: $500 000
Their BATNA: to sell the Curry Field to the city of Morgan Hills.
What they have:
x 8 000 seats
x Cushy and heated }Áv[}Æ
x Best ball park on the coast
x Support of the community (including Mayor Bob)
x ^PP[vuv]]}v
If they don[t get an offer that meets their cash flow requirement of $240 000, they[ll
walk away.
o Barbara
What she has:
x A baseball team
She started the negotiation with an overconfident and adversarial ^us vs. them_ attitude.
She was planning to walk away if she gets a ridiculous first offer.
x Bargaining Stage
o The Curry BrothersY
Yasked Barbara the kinds of concessions she did, her ticket price, and her total
attendance (which she did not give).
Ydid not give their reservation price.
Ymaintained composure and avoided overreacting to Barbara[s surprise to their initial
offer of $500 000.
Ygave Barbara valid reasons to value the field highly.
Ytheir anchor of $500 000 held for most of the negotiation period.
Y tried to adjust Barbara[s frame by getting her to look at the net figurevthe difference
between gate receipts and the lease price.
Yare confident that they can get more than enough attendance Barbara needs in order
to meet her lease payments.
Yreduced the size of their concessions and were taking longer time between themva
signal that they are unlikely to move much further.
Yfound out that most of the novelties inventory will be worthless anyway. Hence, they
won[t let it become a factor to the name change issue.
www.notesolution.com
2
o BarbaraY
Ywas playing tough; she did not give away much information as she thought that may
give the Curry brothers power.
Ycould have initiated an exchange of information.
Ychose not to make an immediate counter-offer hoping that the Curry brothers would
make a second offer first.
Ywould have set a second anchor and a range of the negotiation would have been
established if she stated a figure after the Curry brothers[ first offer.
Ywas escalating her commitment by not paying more than what she[s paying for at
Woodlands: $175 000.
Yprobably made a mistake in not demanding a more realistic offer before they proceed.
Ywas comparing ball parks and featuresva frame where the deal makes no sense.
Yis not confident that the Curry brothers can get her more than enough attendance she
needs in order to meet her lease payments.
Ywas afraid of being ridiculed if she exceeds her $250 000 anchor, so she[s not open to
other proposals that go higher.
o Both parties were not giving away nor getting much information.
o The negotiation is stalled over the distributive issue of the lease rate despite Barbara being
offered basing her lease rate on attendance.
x Settlement Stage
o Being willing to stay open to new opportunities or possibilities is one way to finding a creative
solution in a negotiation.
o A mock-up of a newspaper page and J.J. Bartel have broken Barbara lose from her $250 000
anchor. Now she believes in the Curry brothers[ attendance projection.
o Now, both parties have to resolve details about parking, stadium control, length of contract,
security, and grand stand maintenance.
o Barbara grabbed an extra concession during the photo session.
www.notesolution.com
3
PART 1: PREPARATION
x Make a list of every negotiating point: what we have that they may value and what they have that we
need.
x Find other options.
x Find your breakeven cash flow.
x Set a target pricevhow much you want to get.
x In all negotiations, the parties must divide the resources.
x Most negotiations are multidimensional. They offer opportunities for integrative, pie-enlarging
solutions.
x /(Ç}v[Ç}vo mutually beneficial proposals, the negotiation may falter and good
opportunities may remain unexplored, leaving potential value undiscovered.
¾ Information
x Often the cure for unrealistic expectations.
x Critical to reaching an optimal agreement.
x Can be obtained through research, asking questions, and listening to others.
¾ Anchors
x Base figures from which negotiators add or subtract to judge offers.
x Research shows that people consistently look for and rely on anchors in making judgements,
whether they are based on anything relevant or not.
x In negotiations, the first number presented often becomes an anchor.
x The position of an anchor very often strongly affects the final outcome.
Common Negotiating Errors That Cause Us to Behave Irrationally
1. Overconfidence
x Most common error in negotiations.
x Can cause us to overlook integrative solutions and opportunities for trade-offs.
x A case where we fail to consider all relevant information and end up with no deal or a
suboptimal one.
x Overconfident negotiators often think they know in advance how a negotiation should end.
x May shut out new sources of information and refuse to consider alternative solutions.
2. Irrational Escalation of Commitment
x ^}u]uU(o]vPZÁÁ}µo(]o](Á}v[ZvPuvUÁo}µr
commitment to getting a deal until we accept one which actually makes us worse off than no
deal at all.
x Out of desire to close the deal, we escalate to irrational levels.
www.notesolution.com

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Description
SCENARIO N Preparation Stage o The Curry Brothers Breakeven cash flow: $225 000 Target price: $500 000 Their BATNA: to sell the Curry Field to the city of Morgan Hills. What they have: N 8 000 seats N Cushy and heated }L[Z} N Best ball park on the coast N Support of the community (including Mayor Bob) N ^o22Z[LKL]]}L If they don[t get an offer that meets their cash flow requirement of $240 000, they[ll walk away. o Barbara What she has: N A baseball team She started the negotiation with an overconfident and adversarial ^us vs. them_ attitude. She was planning to walk away if she gets a ridiculous first offer. N Bargaining Stage o The Curry Brothers; ;asked Barbara the kinds of concessions she did, her ticket price, and her total attendance (which she did not give). ;did not give their reservation price. ;maintained composure and avoided overreacting to Barbara[s surprise to their initial offer of $500 000. ;gave Barbara valid reasons to value the field highly. ;their anchor of $500 000 held for most of the negotiation period. ; tried to adjust Barbara[s frame by getting her to look at the net figureLthe difference between gate receipts and the lease price. ;are confident that they can get more than enough attendance Barbara needs in order to meet her lease payments. ;reduced the size of their concessions and were taking longer time between themLa signal that they are unlikely to move much further. ;found out that most of the novelties inventory will be worthless anyway. Hence, they won[t let it become a factor to the name change issue. www.notesolution.com 1
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